“Technical standards define guidelines and specifications across products, services, or systems to ensure consistency, compatibility, and quality,” said “The State of Open Standards,” a recent report by “Linux Foundation Research” in its Introduction. “They are fundamental in facilitating trade, ensuring product safety, and enabling interoperability between different technologies and systems. With such an interconnection of objectives, requirements and stakeholders, approaches to create technical standards tend to vary along a continuum of characteristics. The Linux Foundation supports hundreds of projects that work to achieve standardization across various levels, from agreement within a single project’s ecosystem to globally-adopted ISO Standards.”
Open standards have played a central role in fostering innovation, ensuring interoperability across systems and applications, and driving the growth of the digital economy. For example, in the early decades of the IT industry, proprietary systems from different vendors didn’t interoperate with each other. Just sending an e-mail across two different proprietary networks and applications was quite complicated, as was sharing information across such disparate systems.
This all finally changed in the 1990s when the Internet and the World Wide Web brought a badly needed culture of standards to the IT industry. Open network protocols (e.g., TCP/IP), were widely embraced across the marketplace, making it possible to interconnect systems from any vendors. Internet e-mail protocols, — SMTP, MIME, POP, IMAP, — enabled people to easily communicate with anyone on any system. And the Web’s open standards, — HTML, HTTP, URLs, — enabled any PC connected to the Internet to access information on any web server anywhere in the world. Open standards have also played a central role in the explosive growth of open source software and collaborative innovation.
In addition, despite the major technology advances of the past few decades, the lack of open, interoperable standards has been a major obstacle to progress in critically important industry sectors like healthcare systems and global supply chains.
For example, in October of 2024, LF Research released the findings of a study led by Anna Hermansen, “An Open Architecture for Health Data Interoperability,” that aimed to understand the obstacles for interoperable data standards and open source adoption in the healthcare sector. “The digital transformation of healthcare has led to the exponential growth of data stores useful for providers, researchers, institutions, and companies to improve care for patients,” wrote Hermansen. “A significant aspect of this digital transformation was the introduction of electronic health records (EHRs) around the world, which are digital systems used to capture and manage health data, primarily in a hospital setting. Despite widespread adoption of EHRs, accessing this data remains difficult, as these systems do not interoperate well with each other.” There’s considerable hope that AI could help us better deal with the inherent complexity of the healthcare sector, if we are able to overcome these serious data interoperability and fragmentation issues.
Open, interoperable standards also play a central role in global supply chains. In December of 2024, FedEx business fellow Dale Chrystie published “The Future of Global Supply Chains” in GSMI 5.0, the most recent annual report of the Global Standards Mapping Initiative (GSMI), an industry-focused effort in support of open standards and digital assets. At a global, planet-wide level, “there are no companies, industries, or borders, and data knows no geographic borders,” wrote Chrystie. “The future of global supply chains from this view, will require harmonized, interoperable, and open standards, and a global digital ecosystem that seamlessly and instantly moves trillions of data elements around the world daily.” Achieving this vision requires standards that serve everyone — individuals, organizations, and nations — regardless of their size and must depend on machine-verifiable paperless proofs to ensure the authenticity, legality, and origin of shipments, he added.
“Central to the success of any standard is how easily it can be adopted, which depends in large part on the constraints or capacity of the implementing organization: for example, what will it cost, how long will it take, and what is the return on investment,” noted the open standards LF report.“ Other factors can improve the implementability of a standard. “In particular, standards that have clear, easy-to-understand IP policies - including patent licensing terms - are more valuable to organizations.”
The open standards study is based on a web survey conducted by Linux Foundation Research from April to September 2024 which aimed to understand organizational involvement in standards and the impact that standards have on organizations. The survey reached out to Linux Foundation members, partner communities, standards organizations, and social media among others. After extensive prescreening to ensure that respondents had sufficient professional experience, the final sample comprised 235 valid responses.=
Let me summarize a few of the survey’s key findings.
Overall, most organizations perceive standardization as highly beneficial
How much do you agree with the following statements about the value of standards to your organization?
- Standardization makes it easier to meet regulatory requirements (80%);
- Has helped my organization avoid vendor lock-in (78%);
- Helps rely on standards and/or open source as a selling point for products and services (73%);
- Helps deliver more innovative products and solutions (72%);
- Reduces the cost of goods and services my organization purchases or provides (67%);
- Makes it faster or easier to build products or deliver solutions (66%);
- Has helped reduce switching and/or upgrade costs (65%); and
- Standardization has helped my organization earn more profit (63%).
How much do you agree with the following statements about the value of standards to the markets where your organization operates in?
- Standardization has helped our markets mature and grow (77%);
- Enables market-side competition and/or innovation (76%);
- Has increased the value of our markets (69%);
- Standards are beneficial to our markets and/or our business (67%); and
- Standardization has reduced the barriers to entry for our market (59%).
Standardization benefits the whole tech industry (average agreement by tech sector)
- Infrastructure and data centers (79%);
- Telecommunications (78%);
- Domain-specific tech, e.g., FinTech, BioTech, EdTech, etc (76%);
- Software development (70%);
- Hardware semiconductors (68%);
- Data management and analysis (66%);
- Industrial robotics/IoT/manufacturing (63%); and
- Cybersecurity (60%)
“Organizations recognize the benefits of standardization to their business and the markets in which they operate. These benefits include compliance, avoiding vendor lock-in, enticing customers, promoting market maturity and growth, and encouraging innovation.”
But they value different open standards attributes
How valuable are the following open standards attributes? (very high or high)
- The standard is royalty free (78%);
- Its final and/or draft specifications are openly published and publicly accessible (76%);
- It has clear, easy to understand IP agreements (71%);
- It is extensible and/or compatible with other specifications my organization uses (70%);
- It was developed using a transparent process (68%);
- It is managed/maintained by multiple stakeholders (67%);
- It went through a wide review or open comment process (66%); and
- It has clear, easy-to-understand patent licensing terms (64%).
When evaluating specifications, how important are the following factors? (Extremely/Very important)
- The specification has been widely reviewed for security, privacy, and other safety concerns (75%);
- Public, technical support, tutorials, and other non-specification materials are widely available (71%);
- The specification is available under royalty-free terms (68%);
- The specification meets regulatory or other criteria (68%); and
- There is an active and engaged community (67%);
“Attributes typically associated with open standards, such as being royalty-free and having widely reviewed specifications, are highly valued by organizations of different sizes and industries. There’s growing skepticism about return on investment for licensing standards-essential patents (SEPs). Most organizations do not view royalty-free standards as a threat to their business models, which challenges traditional notions about the importance of patent licensing fees for funding innovation activity.”
Open activities are among the key indicators of innovation
What are the activities your organization does that best indicate that it is an innovative organization?
- Developing innovative products, services, and solutions (63%);
- Being early adopters of innovative technologies —, e.g., AI, — in core products/services (55%);
- Heavily adopting open source software and/or open source specifications (53%);
- Actively supporting research and development (R&D) (47%); and
- Cooperating with end users and other partners on R&D (46%).
“Engagement in open, collaborative activities is seen as a key indicator of innovation, which far outranks filing patent applications. This trend is consistent across different organization sizes and types, suggesting a shift towards more open, collaborative approaches to innovation.”
Participating in standards development provides multiple benefits for organizations
What obstacles limit an organizations participation in the development of standard?
- A lack of the funding resources required to participate (53%);
- An inability to measure the financial benefits of standardization (39%);
- A lack of organizational knowledge about how to contribute (35%);
- A lack of business or product need (32%); and
- A fear of leaking intellectual property (19%).
What are the most compelling reasons to consider participating in standards development?
- Improving interoperability of systems or services (64%);
- Improving the overall quality or experience of standards currently being used (56%);
- Influencing the evolution of the market or technology (51%);
- Satisfying customer needs and demands (50%); and
- Improving the reputation of the organization (50%).
“Organizations are primarily motivated to participate in standards development to improve interoperability, enhance the quality of standards they use, and influence market evolution. The main barriers to participating in standards development are resource-related rather than intellectual property or protectionism concerns.”
Conclusions
“This report enhances our understanding of how organizations perceive and engage with technical standards, particularly emphasizing the value of open standards,” wrote the LF report in conclusion. “The findings challenge historic views on patents and innovation, supporting a new paradigm in technological advancement and market competition.”a protective measure than a direct revenue generator or competitive advantage.”
“Finally, we suggest an opportunity for organizations to collaborate on materials and messages that help stakeholders make the business case for participating in specific standards.”
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